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LinuxOne Continued Complications

Posted by CmdrTaco on from the shady-dealings-in-the-linux-world dept.

Derek Simkowiak writes "After I informed a potential IPO underwriter about LinuxOne, Inc., they threatened to sue me. What happened after that was even more disappointing". This is an interesting exchange of opinions, facts, threats, and retractions. I highly recommend anyone interested in the future of Linux and Business read this article.

23 of 227 comments (clear)

  1. lawyer's letter by Anonymous Coward · · Score: 3

    The "threatening legal letter" from the Hotmail account appears to be an amateurish fake. I would be very surprised if it turned out to have been sent by a real lawyer. Notice also that when you send threatening letters through e-mail, you don't need real legal letterhead to print them on.

    1. Re:lawyer's letter by Chuck+Milam · · Score: 5

      "The "threatening legal letter" from the Hotmail account appears to be an amateurish fake. I would be very surprised if it turned out to have been sent by a real lawyer. Notice also that when you send threatening letters through e-mail, you don't need real legal letterhead to print them on."

      It would surprise me as well to see an attorney for a "technology" firm using a hotmail account to send offcial correspondence. Some things that raised the red flag for me in this "lawyer's" E-Mail:

      • "Derek- I am the lawyer for LinuxOne, Inc." Hmm. Most of the legal correspondence I've seen is certianly more formal than this, even when delivered via E-Mail. For example, Instead of "Derek-" the greeting would be "Derek :" or "Mr. Simkowiak:". Also, most lawyers refer to themselves as "attorneys," not lawyers.
      • "I have read with disgust the lies..." This certianly seems to be an inflammatory statement, not something a good attorney would open a letter with. Again, it just seems too informal.
      • "This constitutes written demand for you to retract your false and malicious statements within 3 days, failing which, you, and your company, will be subject to civil prosecution for your actions. Your immediate action would seem most prudent.: Something just plain smells fishy about this statement as well. Don't attorneys usually cite some legal code or at least make it sound more formal when they insinuate that there has been some sort of wrong committed against a client?
      • "Michael J. Morrison, Esq." Attorneys usually close with the name of their firm. I would hope the LinuxOne isn't using a single, independent attorney instead of a larger firm to conduct their business.

      Overall, this whole message just seems too informal. Most legal communication follows a strict style, including snail mail addresses, formal greetings, closings, and well-defined paragraphs and sentence structure. My guess is that this is someone "playing lawyer." Or maybe they got one of those "Sally Struthers You CAN Learn to be a Lawyer at Home!" kits?

  2. It isnt for the vendors to sort out by Alan+Cox · · Score: 4

    Policing by competitors isnt right. The SEC is charged with protection of US investors from fraud. You should take it up with them, as should
    everyone else who is concerned and has hard evidence.

    1. Re:It isnt for the vendors to sort out by remande · · Score: 3
      How do we deal with people who break the rules? Everybody tell your broker! Tell them exactly what is wrong with LinuxOne, and point them to documents.

      Many, if not most, of the reasons behind the troubles we see at LinuxOne make sense to financial types; you don't have to explain technical concepts to them. If enough brokers and financial types get enough LinuxOne anti-buzz about this, they will send in researchers, and show them exactly what to look for. The results of that research can get the financial community to avoid LinuxOne in droves, taking their investors with them. Remember, these people don't like being wrong.

      --

      --The basis of all love is respect

    2. Re:It isnt for the vendors to sort out by dillon_rinker · · Score: 3

      Policing by competitors isnt right.

      If by "policing" you mean "law enforcement", then I would agree; only the government should be arresting, charging, convicting, and fining people.

      But if by "policing" you mean "Verifying compliance with the law and reporting noncompliance to appropriate authorities," I'd have to disagree. No one is more interested in a company's compliance with the law than their competitors. No one else has as much potential to be damaged. Law enforcement doesn't know as much about a particular industry as the players in the industry. In short, I believe that if a company violates the law in a subtle way, the company's competitors are in the best position to recognize the violation and are most influenced by the violation.

      I further disagree with this because I feel it places an unrealistic burden on law enforcement. They can't be everywhere; they can't know everything. They depend on the citizenry for much information about crimes. I do a fair bit of "policing" in my neighborhood. I don't expect that the police department can be as aware of goings on in my neighborhood as I can be.

      When a Rottweiler is loose in my neighborhood, I call Animal Control. When I see an unfamiliar car cruising slowly down the dead-end road I live on, I call the police. When somebody dumps concrete on my lawn, I call the city codes department. I could wait for law enforcement authorities to do their job and not try to do it for them; I could sit back and say "Hey, policing by the citizenry - that's a police state! That's anti-American! That's Naziism!" And taken to an extreme, yes, it is. But I feel that common sense would dictate that I'm responsible for myself and my surroundings, and the government is a tool that I can use to influence them. They are not a safety net or security blanket or even an organization I can rely on to do the right thing.




      (Off-topic moderation rant)
      As I look at this comment, I see it was moderated up as "Informative." Informative in what way?
      Policing by competitors isnt right.
      Opinion.

      The SEC is charged with protection of US investors from fraud.
      Common knowledge.

      You should take it up with them, as should
      everyone else who is concerned and has hard evidence.
      A plea for good citizenship.

      No disrespect is meant to Alan Cox, but the moderation of this comment looks a LOT like hero worship. Of course, there's no way to tell if the person with user id "Alan Cox" is male, or is named Alan Cox, or is the Alan Cox we are all familiar with.

  3. LinuxOne -- the case for the defence by Anonymous Coward · · Score: 5

    I asked a securities analyst what he would tell a client about this one; here's what he told me. Looks surprisingly positive in the circumstances:

    The value of LinuxOne's business is inestimable. The company has made an immeasurable contribution to the open source software, and can expect copious intangible rewards for doing so. The CEO has no small degree of experience as a tech-businessman, and will manage the company with his usual degree of skill for its entire future. Investors can look forward to profits of anything up to 500% more than the company is making now. This is an IPO which the investment community should be falling over each other to learn about.

    1. Re:LinuxOne -- the case for the defence by Coriolis · · Score: 4
      I can't see anything to disagree with here:

      The value of LinuxOne's business is inestimable.
      There's no way we can tell how much this business is worth. Probably nothing.

      The company has made an immeasurable contribution to the open source software...
      The company's contribution to OSS does not register on any known scale of measurement.

      and can expect copious intangible rewards
      i.e., no money.

      The CEO has no small degree of experience as a tech-businessman
      Factually speaking, it's miniscule, not small.

      manage the company with his usual degree of skill
      Bear in mind his usual degree of skill, here...

      for its entire future
      Which is measurable in weeks.

      profits of anything up to 500% more than the company is making now
      Remember, 5 x 0 = 0

      This is an IPO which the investment community should be falling over each other to learn about.
      After all, you wouldn't want to invest in it by accident, would you?

      --
      Rgasuya aata! : I have been coding Perl and cannot tell where my fingers are now!
  4. Mob action is not needed by Ground0 · · Score: 3

    A posse has to be organized not just thrown together. As LinuxOne could be a blemish to the OpenSource community, I think we do need to respond to the LinuxOne issue.
    But please, I beg people, an organized well thought out plan with good leadership should be the correct way to handle this instead of getting out the torches and pitchforks and storming Frankensteins castle.

  5. Well by Otto · · Score: 3

    I'll reserve my opinions about LinuxOne and fall back on Otto's Rule of Life #4:

    "Never attribute to malice that which can be adequately explained by stupidity."

    (Note: this is not original, as explained by Otto's Rule of Life #2: "If you have to, steal it.")

    :-)
    ---

    --
    - Give a man a fire and he's warm for a day, but set him on fire and he's warm for the rest of his life.
  6. Disgusting by seandunn · · Score: 3
    I really have to raise my eyebrows at any company that releases a rather shoddy product, makes a lot of noise (read hype), and offers support, which they charge an arm and a leg for; and I'm not talking about MS.

    But seriously, after reading the previous poor reviews. of LinuxOne and this mans story I have to wonder if its just a bunch of MBAs, and their MSCE friend who "saw that Leenux thing" and the RedHat IPO, who thought "Linux=Money".

    This is a sad state of affairs, but I'm reminded of other fly by night companies that I have run across, such as one company who wanted to get content from a magazine that my company publishes. After finding out that they use a redundant array of iMACs as their web servers (no, I'm not kidding) we turned them down.

    The best way to kill these companies is just to ignore them, they only live on hype and MBAs who want to IPO real quick to make money. If no one buys their stock, they shrivel up and die after their initial investment dries up.

  7. This smells to high heaven by jd · · Score: 3
    The directors donate their stocks, piecemeal, to "charitable organisations" that they run, which no doubt get cashed in ASAP. Soon, the board of directors have liquidated their stocks, and are free to fly the coop. And there's not a damn thing anyone can do.

    Do I have hard evidence that this is their intent? No. Do I have any evidence at all? I have the evidence we've all got that LinuxOne is a rip-off. The RPM files speak for themselves, the documentation is a rip-off, the SEC filing is a clone of Red Hat's, there's nothing "value added" there at all, the ticker name is a blatant mis-use of the Linux name (and -may- fall afoul of Linus Torvald's trademark) and (as Bruce Perens has pointed out), some of their alleged financing has come from a corner store. Sorry, but most corner stores don't have $500,000 in the till, even if they had a till large enough.

    --
    It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
  8. This press is not good for Linux by 348 · · Score: 3
    Derek- I am the lawyer for LinuxOne, Inc. I have read with disgust the lies you have been spreading over the internet recently regarding the company, its principals and products.

    This really upsets me. First off LinuxOne is not really the sort of positive culture we are looking to help promote Linux as an industrial strength OS, also with their history of "shadiness" it give the Linux community a black eye.

    Some say, any press is ggood press, but in this case I think Linux could do without the association with LinuxOne. With the statement above, (from a Hotmail account, feel the professionalism), the lawyer references lies which I would question which party is not being up front. The whole LinuxOne mess is going to dammage the Linux effort as a whole if it doesn't go away soon.

    We don't need firms with reputations as poor as LinuxOne waving the opensource flag.

    Never knock on Death's door:

    --

    More race stuff in one place,
    than any one place on the net.

  9. Very suspicious, on both sides! by Duxup · · Score: 3

    This whole LinuxOne deal has gone beyond shocking to the point where it's just weird. To me it seems there's allot more going on than just what we've heard. A lawyer writing from a Hotmail account just screams of a prank (and not a very good one at that). I'm also a bit confused by Derek Simkowiak's stated intent to write "to clear up the nasty reputation they've received on the Internet" since he never actually explains how he intended to do so. This just seems awfully questionable since some key info is also not provided (i.e. the name of the investment firm he wrote). I'll wait until I hear some independent info before I believe this one.
    However regarding LinuxOne, I wouldn't' be shocked if the whole LinuxOne thing turns out to be a bizarre prank or something more than just a ploy to release an IPO and make some bucks, it just seems that there is something else there. Not to say it shouldn't be watched closely.

  10. Ok lemme get this straight... by Merk · · Score: 3

    According to the warning letter, LinuxOne's lawyer uses a hotmail account. Sounds like a pretty prestigious law firm.

    The letter doesn't even look like a letter written by a lawyer. For example when does a lawyer call him/herself a lawyer and not an attorney? I, unfortunately, have received a "cease and decist" letter from a lawyer at one point, and this looks nothing like what I received. The one I received gave specific directions on what they wanted me to do, and legal specifics of what they were accusing me of doing. Maybe you poor folks who have been involved with the DeCSS stuff can comment on your legal letters? This one talks about "lies you have been spreading over the internet". Last I heard, lying on the 'net was legal.

    Btw, I'm a hot blonde, 6'2", 36-24-36... *grin*

  11. www.linuxone.net by phee · · Score: 3

    Derek mentions in his letters to LinuxOne et al that telneting to www.linuxone.net resulted in a "welcome to Red Hat" type message. They've fixed that now (it claims "LinuxOne release 1.2" now) but they apparently don't even know how to hack the Apache code so that it too doesn't claim "Apache/1.3.6 (Unix) (Red Hat/Linux)".
    Try it yourself...

    "All truth passes through three stages: first, it is ridiculed; next it is violently attacked; finally, it is held to be self-evident."

    --

  12. 530 Message by shinji · · Score: 4

    Try this! That 530 message in not a real 530 message. They have posted it to fool you. FTP to
    140.174.127.95 (the site listed on their webpage).
    try Anonymous login. first you get back.
    530-There are too many users ...
    but next you get back a real 530 message
    530 Login Incorrect
    I think linuxone does not want anyone to download linuxone and make everyone think lots of people are downloading it

    --
    Remove the spam reference to email
  13. Motley Fools Covered LinuxOne Also by mssymrvn · · Score: 4

    http://www.fool.com/portfolios/rulemaker/2000/rule maker000106.htm

    Rob Landley didn't seem to have too many positive things to say about them. The article above is an interesting read. They go into a little more detail about the background of the founder(s).

  14. The Linux community and business: oil and water? by InsomniacsDream · · Score: 3

    Not that I have anything against Linux and business, but the two don't really mix very very (at least in the traditional business model). I mean, business is all about competition, and Linux is all about cooperation. However, if Linux DOES succeed (in the marketplace), then it may very well change the way people think about business in general.

    One of the concepts that LinuxOne has apparently not managed to grasp yet is that you can't isolate yourself from the Linux community and still expect to succeed. This does work in the traditional business model where competition is the rule, but not in a community founded on the principles of cooperation and sharing ideas openly.

    I have no doubt that many investors will get burnt by LinuxOne and related scams, but that is just because they are ignorant of the 'way Linux works'. These investors probably deserve to lose their money because they did not spend the time researching the company's credentials. When they lose their money, however, they will learn a valuable but harsh lesson.

  15. This sounds a bit awful... by seebs · · Score: 3

    Why would a potential underwriter share the information about the complaint *with the company*? If I'd given him permission to share my name with colleagues, I would *NOT* expect him to share it with the company under suspicion, but rather, with other people who might be affected if the suspicions were correct.

    Am I just crazy?

    --
    My blog: http://www.seebs.net/log/ --- My iPhone/iPad app: http://www.seebs.net/seebsfrac/
  16. Cashing in on LinuxOne the right way. by segmond · · Score: 3

    I smell lots of $$$. How? First of all, it took these guys age to figure out that they had to edit /etc/issue to make their red hat box say linuxone whatever. I could have cashed in on this, by telling them how, and having them pay me. As everyone knows, their webserver still says redhat, we can cash in on this too. Hey, how about we modify apache for you to say linux one for only $500. They kludged the ftp server to give message that the server is full. But it is obvious, heh, we can hack your ftp fake message to appear more authentic for only $5000. These guys are porting windows programs to linux and stuff, they said so. In order to do this, they need developers, Heh, why don't we code for them. I will port notepad.exe and calc.exe, I will leave clock.exe and paintbrush.exe for you. This is money making opportunity people!


    --
    ------ Curiosity killed the cat. {satisfaction brought it back | it didn't die ignorant | lack of it is killing mankind
  17. The Lawyer exists! Enough Already! by IrishLeo · · Score: 5

    A quick search from www.adanet.org nets:

    MICHAEL J. MORRISON
    1995 Ridgeview Dr.
    Reno, Nevada
    (Washoe County)

    ADMITTED: 1976

    LAW-SCHOOL: McGeorge School of Law (J.D.)

    COLLEGE: United States Air Force Academy (B.S.)

    BORN: 1945

    ISLN: 902352344

    The IPO was filed in Nevada was it not? Seems to me that this could be a legit lawyer.

    URL: Abanet link to Mr. Morrison's Info


    Also of interest is the Business Address cited in the LinuxOne S-1/A:

    BUSINESS ADDRESS:
    STREET1: 1495 RIDGEVIEW DR
    STREET2: SUITE 220
    CITY: RENO
    STATE: NV
    ZIP: 89509
    PHONE: 7758276300


    URL: FreeEDGAR S-1/A Filing for LinuxOne, Inc.

    Conclusion. This e-mail was most likely sent by a real lawyer working for LinuxOne. Unless, of course, you want to get really paranoid and say that they saw the name on the building while renting their fake business office and decided to steal it for harassing honest, hardworking netizens...

    Read the S-1/A a little further down and find:

    With Copies To:

    Michael J. Morrison, Esq.
    1495 Ridgeview Drive, Suite 220
    Reno, Nevada 89509
    Telephone: (775) 827-6300

    My guess is they had a real lawyer involved with the filing of their IPO material.

    Nuf Said...

    --
    Nothing Simple Is Ever Easy
  18. Did LinuxOne Lie About Red Hat? by cburley · · Score: 4
    A lot of people forget than [sic] a large number of programmers were promised stock by Red Hat and never received any.

    That quote comes from the 5 Jan 2000 10:01:22 -0800 email Robert Philips wrote to Derek.

    Being a recipient of the famous email Red Hat sent out to contributors to invite them to participate in the RHAT IPO, I don't recall any promise made that we would actually receive stock.

    Can anyone provide actual evidence of such a promise, or is this just a case of Mr. Philips inflating his rhetoric to make Red Hat look bad (and, therefore, LinuxOne look better by comparison)?

    Note that this could be considered "splitting hairs" by some -- I'm distinguishing Red Hat offering contributors the opportunity to purchase shares from an actual promise that they would receive shares. There's no need to accuse Red Hat of the latter, which is what Mr. Philips appears to have done, if all they did was the former. (It's like the distinction between right to free speech and the right to be heard -- the former is not equivalent to the latter.)

    --
    Practice random senselessness and act kind of beautiful.
  19. Actually the 530 message IS legitimate. by bero-rh · · Score: 5

    That 530 message is not a real 530 message. They have posted it to fool you. [...] first you get back: 530-There are too many users ... but next you get back a real 530 message 530 Login incorrect

    Which is just what the ftp server they're using does when there are too many users.
    It first send some 530-Whatever-the-admin-puts, then a 530 Login incorrect.
    This is perfectly valid according to the RFCs, as long as all but the last line have a "-" after the 530.

    I wrote the server program they're using, so rest assured I know how it behaves.

    It's entirely possible, though, that they set a limit of 1 user and they have that one permitted connection opened for themselves - I can't get in either.

    --
    This message is provided under the terms outlined at http://www.bero.org/terms.html